Homework Answers
Answer:
The conventional payback period is between Period 3-4 as shown in the table with yellow shaded cells.
But if we discount the cash flow at 8% interest rate then the discounted payback period is between Period 4-5 as shown in the table with blue shaded cells.
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3. If a project costs $150,000 and is expected to return $40,000 annually, what is the...
If a project costs $100,000 and is expected to return $20,000 annually, how long does it...
If a project costs $100,000 and is expected to return $20,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i = 15%? Assume that the cash flows occur continuously throughout the year. The payback period is 5 years. (Round to one decimal place.) The discounted payback period at i = 15% would be years. (Round to one decimal place.)
If a project costs $100,000 and is expected to return $25,000 annually, how long does it...
If a project costs $100,000 and is expected to return $25,000 annually, how long does it take to recover the initial investment? what would be the discounted payback period at 15967 Assume that the cash flows occur continuously throughout the year
you are considering a project with an initial cash outlay of $100,000 and expected free cash...
you are considering a project with an initial cash outlay of $100,000 and expected free cash flow of $50,000 at the end of each year for 3 years. the required rate of return for this project is 10 percent. a. What is the project's conventional payback periods? b. What is the project's discounted payback period? c. what is the project's NPV? d. what is the project's PI? e. what is the project's IRR?
11-8: Payback Period Discounted payback Project K costs $40,000, its expected cash inflows are $9,000 per...
11-8: Payback Period Discounted payback Project K costs $40,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 11%. What is the project's discounted payback? Round your answer to two decimal places. years
Please help me solve this economics problem If a project costs $70,000 and is expected to...
Please help me solve this economics problem
If a project costs $70,000 and is expected to return $19,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i = 14%? Assume that the cash flows occur continuously throughout the year. The payback period is years. (Round to one decimal place.)
The IRR evaluation method assumes that cash flows from the project are reinvested at the same...
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $2,750,000. The project's expected cash flows are: Year Year 1...
need question 3 answered 2. Calculating Payback (LO2) An investment project provides cash inflows of $585...
need question 3 answered
2. Calculating Payback (LO2) An investment project provides cash inflows of $585 per year for eight years. What is the project payback period if the initial cost is $1,700? What if the initial cost is $3,300? What if it is $4,900? 3. Calculating Payback (LO2) McKernan Inc. imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should they accept either of them? -$60,000 Year...
Consider the following cash flow and project balance table: a) Complete the table by calculating i....
Consider the following cash flow and project balance table:
a) Complete the table by calculating i.
b) What is the undiscounted payback period?
c) What is the discounted payback period?
d) What is the NPV at i ?
e) What is the Internal Rate of Return (IRR)?
n 0 1 2 3 An -$10,000 ? ? | 8,000 ? PB(i)n $10,000 -11,000 -8,200 -1,840 3,792 7,550 5
7. The payback period The payback method helps firms establish and identify a maximum acceptable payback...
7. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Sigma's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you compute the project's payback...
If a project costs $100,000 and is expected to return $20,000 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i = 15%? Assume that the cash flows occur continuously throughout the year. The payback period is 5 years. (Round to one decimal place.) The discounted payback period at i = 15% would be years. (Round to one decimal place.)
If a project costs $100,000 and is expected to return $25,000 annually, how long does it take to recover the initial investment? what would be the discounted payback period at 15967 Assume that the cash flows occur continuously throughout the year
11-8: Payback Period Discounted payback Project K costs $40,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 11%. What is the project's discounted payback? Round your answer to two decimal places. years
Please help me solve this economics problem
If a project costs $70,000 and is expected to return $19,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i = 14%? Assume that the cash flows occur continuously throughout the year. The payback period is years. (Round to one decimal place.)
The IRR evaluation method assumes that cash flows from the project are reinvested at the same rate equal to the IRR. However, in reality the reinvested cash flows may not necessarily generate a return equal to the IRR. Thus, the modified IRR approach makes a more reasonable assumption other than the project's IRR. Consider the following situation: Celestial Crane Cosmetics is analyzing a project that requires an initial investment of $2,750,000. The project's expected cash flows are: Year Year 1...
need question 3 answered
2. Calculating Payback (LO2) An investment project provides cash inflows of $585 per year for eight years. What is the project payback period if the initial cost is $1,700? What if the initial cost is $3,300? What if it is $4,900? 3. Calculating Payback (LO2) McKernan Inc. imposes a payback cutoff of three years for its international investment projects. If the company has the following two projects available, should they accept either of them? -$60,000 Year...
Consider the following cash flow and project balance table:
a) Complete the table by calculating i.
b) What is the undiscounted payback period?
c) What is the discounted payback period?
d) What is the NPV at i ?
e) What is the Internal Rate of Return (IRR)?
n 0 1 2 3 An -$10,000 ? ? | 8,000 ? PB(i)n $10,000 -11,000 -8,200 -1,840 3,792 7,550 5
7. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Sigma's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you...
The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its initial investment from Project Beta's expected future cash flows. To answer this question, Cold Goose's CFO has asked that you compute the project's payback...
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